As part of its continued commitment to rigorous oversight of oil and gas activities in the Arctic, Secretary of the Interior Ken Salazar today announced that the Department has launched an expedited, high-level assessment of the 2012 offshore drilling program in the Beaufort and Chukchi Seas to review practices and identify challenges as well as lessons learned. The review, which is expected to be completed within 60 days, will pay special attention to challenges that Royal Dutch Shell Plc (NYSE: RDS.A / RDS.B) encountered in connection with certification of its containment vessel, the Arctic Challenger; the deployment of its containment dome; and operational issues associated with its two drilling rigs, the Noble Discoverer and the Kulluk.
The review is consistent with the Administration’s commitment to safe and responsible exploration for energy resources in the Artic and will help inform future permitting processes in the region. The United States Coast Guard will provide technical assistance for the review.
“Developing America’s domestic energy sources is essential for reducing our dependence on foreign oil and creating jobs here at home and the Administration is fully committed to exploring for potential energy resources in frontier areas such as the Arctic,” said Salazar. “Exploration allows us to better comprehend the true scope of our resources in the Arctic and to more fully understand the nature of the risks and benefits of development in this region, but we also recognize that the unique challenges posed by the Arctic environment demand an even higher level of scrutiny.”
The review of Shell’s Arctic activities will be led by Interior’s Bureau of Ocean Energy Management (BOEM) Director Tommy Beaudreau, who has been selected to serve as the Acting Assistant Secretary for Land and Minerals Management. The review will look at Shell’s safety management systems, its oversight of contracted services, and its ability to meet the strict standards in place for Arctic development.
“As part of our Department’s oversight responsibilities, our review will look at Shell’s management and operations in the Beaufort and Chukchi Seas,” said Beaudreau. “We will assess Shell’s performance in the Arctic’s challenging environment.”
During limited preparatory drilling operations last season, Shell constructed top-hole sections for one well each in the Chukchi Sea and the Beaufort Sea. BSEE conducted unprecedented oversight and had inspectors present onboard each Shell rig around the clock throughout those operations.
“The Bureau of Safety and Environmental Enforcement demands operators make safety at all levels at all times their number one priority, and we expect the highest level of performance from operators in the Arctic,” said BSEE Director James A. Watson. “As we oversee historic domestic drilling, BSEE will continue its unprecedented oversight of drilling activities in the Arctic and we will continue to hold anyone operating in public waters to the highest safety and environmental standards.”
In the wake of the Deepwater Horizon tragedy, the Obama Administration put in place significant new safeguards to protect the environment and the workers onboard offshore drilling rigs. These new safety measures include heightened drilling safety standards to reduce the chances that a loss of well control might occur in the first place, as well as a new focus on containment capabilities in the event of an oil spill.
As part of the Obama Administration’s all-of-the-above energy strategy, domestic oil and gas production has grown each year the President has been in office, with domestic oil production currently higher than any time in nearly a decade and natural gas production at its highest level ever. Foreign oil imports now account for less than 50 percent of the oil consumed in America – the lowest level since 1995.
The U.S. Coast Guard today also announced it has initiated a comprehensive marine casualty investigation regarding the recent grounding of the drill rig Kulluk. BSEE and the National Transportation Safety Board will provide technical assistance for the Coast Guard’s investigation.